Chase Carey, the Formula One chief executive, has volunteered to take a pay cut greater than the 20% agreed by senior management as a result of the Covid-19 pandemic.
Photograph: Octane/Action Plus/Shutterstock

Formula One Group has placed half of its staff on furlough as the sport addresses the serious financial implications of coronavirus.

With nine races now called off after the Canadian Grand Prix on Tuesday became the latest victim of the pandemic, F1 is potentially facing a major loss of income, with no guarantees any meetings will take place this year. As the teams consider how to address this issue collectively, Mercedes announced they are now manufacturing 1,000 breathing aids a day for the NHS at their engine plant in Brixworth.

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F1 employs approximately 400 staff in the UK, 50% of which have now been placed on furlough for two months, with senior management accepting a 20% pay decrease. The chief executive, Chase Carey, has voluntarily taken an even greater cut to his salary.

Formula One has yet to make any official comment on the decision but the sport faces a potentially damaging financial shortfall that may only become worse. All three of its main revenue streams are under threat. Broadcast earnings represent 38% of income, race hosting fees 30% and sponsorship 15%.

The race hosting fees have already taken a major hit, with nine of the proposed 22 races called off. Broadcasters are understood to receive a sliding scale of recompense if the number of races falls below 15 and sponsors will have similar contractual agreements. F1’s financial commitments remain, however. They still have to pay the teams their prize money from the 2019 season, which amounts to $1.012bn, and have operating costs of $381m.

The first scheduled race is now the French GP on 28 June and Carey has declared he is hopeful the sport can run between 15 and 18 races this season. This may be wishful thinking. On Tuesday, after MotoGP cancelled two more races in Italy and Catalunya, the sport’s chief executive, Carmelo Ezpeleta, warned that the entire season may be cancelled unless a successful vaccine for Covid-19 is deployed.

“We will consider all possible solutions, but to be honest I would be surprised if it were possible to host races this year,” he said. “Until we have vaccines to stop the spread of coronavirus, it will be very difficult or impossible to organise MotoGP and other major events. Even if life should normalise a bit again, the travel bans will remain in place in all countries.”

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A meeting of teams to consider further lowering the budget cap from the accepted $150m failed to reach an agreement on Monday and they will reconvene later in the week. However, the seven teams based in the UK all remain committed to the Project Pitlane initiative, putting staff and resources to work in combatting coronavirus. Last week Mercedes announced that working with University College London they had reverse-engineered a breathing device known as the Continuous Positive Airway Pressure (CPAP).

They have repurposed their engine plant, the high-performance powertrain technology centre, and the tools previously manufacturing pistons and turbochargers for their cars which have won the past six drivers’ and constructors’ championships are now making the device at a rate of 1,000 a day. They have also publicly released the design of the CPAP so manufacturers around the world can reproduce it.

On Tuesday the teams, F1 and the FIA also agreed to extend the current shutdown period from 21 to 35 days. The shutdown, usually taken in the summer break but implemented now because of the coronavirus, must be taken during the months of March, April and May. Projects related to assisting work against the virus can continue.